UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
                                    FORM 10-K

            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 1999
                                       OR
            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

              For the transition period from ________ to __________

                         Commission File Number: 0-5537

                        INVESTMENT PROPERTIES ASSOCIATES
             -----------------------------------------------------
             (Exact Name of Registrant as specified in its charter)

A New York Limited Partnership                        13-2647723
------------------------------              ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)
                  60 East 42nd Street, New York, New York 10165
               -------------------------------------------------
              (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:  (212) 687-6400

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:

             820,000 Participations in Limited Partnership Interest
             ------------------------------------------------------
                                (Title of Class)

      Indicate by check mark  whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.   Yes  X   No
                                               ----     ----

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (ss. 229.405 of this chapter) is not contained herein, and
will not be  contained,  to the best of  registrant's  knowledge,  in definitive
proxy or information  statements  incorporated  by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]

Aggregate  market  value  of the  voting  stock  held by  non-affiliates  of the
Registrant -- Not applicable.

              APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
         Indicate by check mark whether the  registrant  has filed all documents
and reports  required  to be filed by Section 12, 13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.

         Yes_________               No_________

         Documents Incorporated by Reference -- None.


<PAGE>

                                     PART I

         This report contains certain forward-looking statements. Actual results
could differ materially from those projected in the  forward-looking  statements
as a result  of any  number  of  factors  discussed  herein  including,  without
limitation,   under  the  captions  "Management's  Discussion  and  Analysis  of
Financial Condition and Results of Operations" and "Business." When used in this
report, the words "anticipate,"  "estimate," "intend," "believe," "project," and
similar expressions are intended to identify  forward-looking  statements.  Such
statements are subject to certain risks,  uncertainties and assumptions.  Should
one or more of these risks or uncertainties  materialize,  or should  underlying
assumptions  prove  incorrect,  actual  results may vary  materially  from those
anticipated, expected, estimated, intended, believed or projected.

Recent Development
------------------

         Registrant  announced  on April 12, 2000 that,  subject to a variety of
conditions,  including due diligence and definitive documentation, it has agreed
in principle to sell 245 Fifth Avenue,  New York, New York and 261 Fifth Avenue,
New York, New York to a fund  controlled by Koll Bren Schreiber  Realty Advisors
Inc., a Delaware corporation.

         At this time,  Registrant can make no assurances that the conditions to
the  agreement  in  principle  will  be  satisfied  or  that  the  sale  will be
consummated.  If all  conditions  are met, it is expected  that the closing will
occur  within  the next  forty  days.  Registrant  will  continue  to update all
material events concerning this transaction.

Item 1. Business.

         Investment  Properties Associates ("IPA" or "Registrant") is a New York
limited partnership formed pursuant to a Limited Partnership  Agreement dated as
of May 15, 1969,  as amended on October 2, 1969,  October 31, 1969,  December 3,
1969, and May 30, 1997 (the "Partnership Agreement").

         Harry B. Helmsley, a General Partner of Registrant,  died on January 4,
1997. Upon his death, Mr. Helmsley's general partnership  interest in Registrant
was converted to a special limited partner interest,  which was inherited by his
spouse,  Leona M. Helmsley,  from Mr.  Helmsley's estate as of December 31, 1997
(the  "Converted  Special L.P.  Interest").  Under the terms of the  Partnership
Agreement as in effect on the date of Mr. Helmsley's death, the General Partners
were required to create a new limited  partnership  with the same  attributes as
Registrant and to convey all of the assets and liabilities of Registrant to such
entity. Such action would


                                       2
<PAGE>

have  involved  substantial  transfer  tax,  insurance  premium  costs and other
related  expenses and no benefit to the partners of Registrant or to the holders
of Participation Interests ("Participation  Interests" or "PPIs") in the limited
partnership  interest  of  the  limited  partner  of  Registrant.   Accordingly,
Registrant  obtained  the  approval of the holders of a majority of the PPIs to,
among other things, amend the Agreement to permit the remaining General Partners
to elect to continue the business of  Registrant  in the event of the death of a
General  Partner  and to make such  election  with  respect  to the death of Mr.
Helmsley. Such amendments were effective on May 30, 1997 (the "Amendments").  As
contemplated  by the amended  Partnership  Agreement,  effective July 3, 1997, H
Associates  L.L.C. ("H Associates"),  an entity owned by Leona M. Helmsley,  was
admitted as a General Partner of Registrant.  H Associates' economic interest in
Registrant  was  acquired  from  Helmsley-Noyes  Company,  Inc.,  also a General
Partner of Registrant.

         On June 10, 1998,  ScogBell  Acquisition,  L.L.C.,  a Delaware  limited
liability  company  ("ScogBell"),  purchased  from  Leona  Helmsley  all  of her
interests in  Registrant.  The  interests  from this sale that were  acquired by
ScogBell from Leona Helmsley included,  among other things,  general partnership
interests  (0.05%),  special  limited  partnership  interests  (33.29%)  and  an
aggregate of 282,377 PPIs. Also on June 10, 1998,  ScogBell acquired 28,550 PPIs
in the over-the-counter  market. As a result, ScogBell became a beneficial owner
of 310,927 PPIs in Registrant which represents 37.9% of the outstanding PPIs.

         At December 31, 1999, Registrant owned fee titles to, or leasehold
estates in,  three  commercial  properties,  a 50%  interest  in one  commercial
property,  and fee title to two unimproved  real properties  (collectively,  the
"Properties"). The Properties are located in New York, New York; Houston, Texas;
and Newark, New Jersey. During 1999, Registrant sold three of its properties.


                                       3
<PAGE>

         On April 14, 1999,  Registrant  sold the Mojud  Building in Long Island
City,  New York for a sales price of  $6,500,000.  In connection  with the sale,
Registrant  paid sales  commissions  of $162,500 to an  affiliate  of one of the
General Partners and other closing costs of approximately $239,000.

         On May 18,  1999,  Registrant  sold the  Midland  Savings  Building  in
Midland,  Texas for a sales  price of  $300,000.  In  connection  with the sale,
Registrant paid closing costs of approximately $2,000.

         On December 16, 1999, Registrant sold its 1440 Broadway,  New York, New
York property for a sales price of  $152,000,000.  In connection  with the sale,
Registrant  repaid  mortgage debt of  approximately  $17,347,500  and paid sales
commissions  of  $3,800,000  to an affiliate of one of the General  Partners and
other closing costs of approximately $5,047,000.

         In addition, Registrant declared a special distribution of the net
proceeds from the sales of the Mojud,  Midland and 1440  Broadway  properties on
December 16, 1999 to the General  Partner,  Special Limited Partners and holders
of record of its PPIs as of the close of business on December 31, 1999. The PPIs
traded  ex-dividend  on January 19, 2000.  The total  distribution  declared was
$128,000,000,  of which  $64,000,000  was distributed to the General and Special
Limited  Partners on December 16, 1999 and  $64,000,000  was  distributed to the
holders of PPIs in January 2000.

         On December 1, 1994,  Chase loaned  $10,750,000  to  Registrant,  which
funds  were  used by  Registrant  to repay  its 9% Junior  Mortgage  Bonds  (the
"Bonds") in full on such date.  Chase also agreed to extend the maturity date of
Registrant's mortgage loans relating to its 1440 Broadway,  245 Fifth Avenue and
261 Fifth Avenue properties in New York, New York, and to its One North Dearborn
and One LaSalle buildings in Chicago, Illinois (collectively, the "Chase


                                       4
<PAGE>

Loans") from January 2, 1995 to January 2, 1997.  On April 25, 1995,  Registrant
and Chase entered into a Note Modification Agreement providing for the extension
of the  maturity  of the Chase Loans and the cross  collateralization  and cross
defaults  among the  properties  that secure the Chase Loans.  In addition,  the
Registrant  was given the option of paying  interest on the Chase Loans based on
LIBOR plus 2.25% or prime plus  0.375%.  Pursuant to a Second Note  Modification
Agreement, the maturity of the Chase Loans was extended to January 2, 1999.

         On January 2, 1999, a Third Note Modification to the Agreement was made
between  Registrant  and Chase,  which extended the maturity date of the loan to
January 2, 2000 and provided for principal payments with respect to the mortgage
loans of $3,000,000  during 1999.  Scheduled  principal  repayments  aggregating
$2,500,000  were made  through  September  15, 1999,  with the entire  remaining
balance of the loan being  repaid on December  16, 1999 with  proceeds  from the
sale of the Mojud, Midland and 1440 Broadway properties.

         The  $8,000,000  first  mortgage  loan with Apple  Bank  secured by the
building  at 1328  Broadway  (in which  Registrant  had a 50%  tenancy in common
interest) and which bore interest only at a rate of 8.5% per annum became due on
April 30, 1999.  Registrant  continued to make payments of interest only through
December 31, 1999 pending formal  resolution with Apple Bank.  Registrant repaid
its 50% share of such loan on January  18, 2000 upon the sale of its 50% tenancy
in common interest in the 1328 Broadway property.

         (b) Financial Information About Segments. Registrant's sole business is
the  ownership  and operation of  commercial  real estate.  All of  Registrant's
revenues,  operating  profit or loss and assets  relate  solely to such industry
segment.

         (c) Narrative  Description of Business.  Registrant's  only business is
the ownership and operation of  commercial  real  properties  which it leases to
various tenants.


                                       5
<PAGE>

         Registrant's  principal  source of revenues is rent  received from such
tenants.  The primary costs  associated with owning and leasing  commercial real
estate are real estate  taxes,  utilities,  interest on  indebtedness,  property
management  and  leasing  fees,   payroll  and  related  expenses,   repair  and
maintenance expenses and depreciation.  All of the properties owned and operated
by Registrant are set forth in Item 2.

         Registrant's Properties taken as a whole are leased to large numbers of
lessees and  Registrant is not  dependent  upon any single  lessee,  the loss of
which would have a material  adverse effect on Registrant.  Due to the nature of
its business, Registrant has only one identifiable market segment and has no new
products,  uses  no  raw  materials,  owns  no  patents,  trademarks,  licenses,
franchises or concessions and expends no sums for research and  development.  No
material portion of Registrant's business is seasonal in nature.

         Registrant's  needs for  working  capital are similar to those of other
owners and operators of commercial  real property and,  generally,  are provided
for with cash generated from operations and, in some cases, borrowings.

         Each  property  owned by Registrant  competes  with real  properties of
similar  function  and  quality  in  its  geographic  area.   Commercial  rental
properties  within a given  geographic  area  tend to  compete  on the  basis of
location,  amenities  and price.  Demand  for  commercial  rental  space is also
dependent upon economic  conditions  prevailing in the  particular  geographical
area and the quantity of suitable space in such area.

         Registrant  employs  approximately 31 people who handle  maintenance of
its properties. All of the Registrant's other operating functions, which consist
primarily of property leasing and property management services, are performed by
Helmsley-Spear,  Inc. ("HSI") or affiliates of HSI, which entities may be deemed
to be affiliates of Registrant. Management fees


                                       6
<PAGE>

and  leasing  commissions  charged by HSI  aggregated  approximately  $1,288,000
during  the  fiscal  year  ended  December  31,  1999,  $1,969,600  in 1998  and
$2,098,300  in 1997.  HSI also earned  $3,962,500  and  $3,025,000  in brokerage
commissions in 1999 and 1998,  respectively,  in connection with the sale of the
Mojud and 1440 Broadway  properties in 1999 and the Chicago  Properties in 1998.
Registrant  believes that such services are supplied at prices that  approximate
those that would be available from non-affiliates. See Item 13.

Item 2.  Properties.

         General.  At December 31, 1999,  Registrant's  Properties  included fee
titles to, or leasehold estates in, three commercial properties,  a 50% interest
in one  commercial  property,  (which was sold in January 2000) and fee title to
two  unimproved  real  properties.  The  Properties are located in New York, New
York;  Houston,  Texas;  and Newark,  New Jersey.  The  Properties  have a total
rentable area of approximately 1,236,000 square feet.

         The table  below sets  forth a  description  of each of the  Properties
owned by  Registrant on December 31, 1999,  its location,  type of ownership and
rentable area in square feet.

<TABLE>
<CAPTION>

                                                                                      Total Rentable
Property                          Description                      Ownership          Area (Sq. Ft.)
<S>                               <C>                              <C>                <C>
New York, New York

261 Fifth Avenue                  25-story office bldg.            Fee                402,000

245 Fifth Avenue                  26-story office bldg.            Fee                287,000

1328 Broadway (1)
Marbridge Building                11-story office bldg.            50% of Fee         357,000

</TABLE>
----------
(1) On January 18, 2000,  Registrant  sold its 50% tenancy in common interest in
1328 Broadway.


                                       7
<PAGE>
<TABLE>

                                                                                      Total Rentable
Property                          Description                      Ownership          Area (Sq. Ft.)
<S>                               <C>                              <C>                <C>
Texas

Edgewood Shopping Center
(Houston)                         Unimproved Land                  Fee                --

Bellway Shopping Center
(Houston)                         Unimproved Land                  Fee                --

New Jersey

570 Broad Street (Newark)(2)      14-story office bldg.            Fee                190,000
</TABLE>

         Additional  Property  Information.   Four  of  Registrant's  Properties
individually  accounted  for 10% or more of its  total  assets  or  revenues  at
December 31, 1999. Such  properties are referred to above as 1440 Broadway,  New
York,  New York, 261 Fifth Avenue,  New York,  New York,  245 Fifth Avenue,  New
York, New York and 1328 Broadway, New York, New York.

         The  estimated  occupancy  rate  for  the  Registrant's  1440  Broadway
property  (sold on December 16, 1999) for 1999,  1998,  1997,  1996 and 1995 was
approximately 71%, 74%, 74%, 61% and 73%, respectively.  The average annual base
rent per leased square foot at such property was  approximately  $23.59 in 1999,
$22.90 in 1998, $26.91 in 1997, $28.10 in 1996 and $23.94 in 1995.

         The  estimated  occupancy  rate for the  Registrant's  261 Fifth Avenue
property for 1999,  1998, 1997, 1996 and 1995 was  approximately  86%, 84%, 80%,
80% and 78%,

----------
(2) Vacant since 1996.


                                       8
<PAGE>

respectively.  The average rental per square foot at such property
was approximately $23.50 in 1999, $22.88 in 1998, $22.61 in 1997, $21.28 in 1996
and $21.25 in 1995.

         The estimated occupancy rate for the Registrant's 245 Fifth Avenue
property for 1999,  1998, 1997, 1996 and 1995 was  approximately  93%, 78%, 74%,
67%, and 57%, respectively.  The average rental per square foot at such property
was approximately $27.59 in 1999, $25.03 in 1998, $22.17 in 1997, $20.84 in 1996
and $20.38 in 1995.

         The  estimated  occupancy  rate  for  the  Registrant's  1328  Broadway
property for 1999 was  approximately  59%. The average rental per square foot at
such property was approximately $31.30 in 1999.  Registrant sold its 50% tenancy
in common interest in this property on January 18, 2000.

         Registrant's  1440  Broadway  property,  which was sold on December 16,
1999,  is a 25 story  commercial  office  building in midtown  Manhattan.  Three
separate  tenants,  all of  which  are  retailers,  occupied  10% or more of the
rentable  area  of such  property.  The  1999  rent of the  first  retailer  was
$4,256,000.  The 1999 rent of the second retailer was approximately  $1,889,000.
The 1999 rent of the  third  retailer  was  $1,421,000.  Registrant's  261 Fifth
Avenue property is a 25 story building located in midtown  Manhattan.  No single
tenant of such property occupies 10% or more of its rentable area.

         Registrant's  245 Fifth Avenue property is a 26 story building  located
in midtown  Manhattan.  One tenant  occupied 10% or more of the rentable area of
such  property  during the year ended  December  31,  1999 and its 1999 rent was
approximately  $1,222,000.  This tenant has eight  leases,  six of which expired
December 31, 1999 (with  respect to rent of  approximately  $926,000) and two of
which  expire  September  30,  2002  (with  respect  to  rent  of  approximately
$296,000).


                                       9
<PAGE>

         Registrant's  1328 Broadway  property is an 11 story commercial  office
building in midtown Manhattan. No single tenant of such property occupies 10% or
more of the rentable area of such property.

         While the New York commercial real estate market is highly competitive,
Registrant  has achieved  occupancy and rental rates at its New York  properties
which  have  enabled  it to  operate  these  properties  profitably.  Registrant
believes that rental rates will remain high enough to operate  these  properties
profitably for the  foreseeable  future,  although there can be no assurances in
this regard.

         The following  table sets forth certain  information  concerning  lease
expirations for the Registrant's principal properties at December 31, 1999:

<TABLE>
<CAPTION>

                                             261 Fifth Avenue
                                             ----------------
                         Number of              Total Leased                               % of
                      Tenants whose               Area in                              Gross Annual
           Year     lease will expire           Square Feet       Annual Rental           Rental
           ----     -----------------           -----------       -------------           ------
          <S>               <C>                    <C>              <C>                    <C>
           2000             19                      59,400          $1,409,159             15.5%
           2001             12                      41,574             933,300             10.2
           2002             16                      43,957           1,060,654             11.6
           2003              7                      17,011             492,409              5.4
           2004             12                      43,712           1,242,028             13.6
           2005              5                      55,666           1,445,041             15.8
           2006              1                       4,344             143,921              1.6
           2007              7                      86,622           2,053,222             22.5
           2008              0                           0                   0              0.0
       2009 or later         2                       8,585             350,007              3.8
                           ---                     -------          ----------             -----
          Totals            81                     360,871          $9,129,741             100.0
                                                   =======          ==========             =====
</TABLE>


                                       10
<PAGE>
<TABLE>
<CAPTION>

                                               245 Fifth Avenue
                                               ----------------
                         Number of                Total Leased                                %of
                      Tenants whose                 Area in                              Gross Annual
           Year     lease will expire             Square Feet       Annual Rental           Rental
           ----     -----------------          -----------       -------------           ------
          <S>               <C>                   <C>              <C>                   <C>
           2000             10                     25,282          $  616,366              7.7%
           2001             18                     62,935           1,615,415             20.2
           2002             17                     53,968           1,521,656             19.0
           2003              7                     24,527             758,446              9.5
           2004              6                     34,076           1,235,526             15.4
           2005              2                      4,705             139,213              1.8
           2006              2                      7,067             178,160              2.2
           2007              1                     12,456             450,284              5.6
           2008              0                          0                   0              0.0
       2009 or later         4                     39,426           1,488,406             18.6
                            --                    -------          ----------            -----
          Totals            67                    264,442          $8,003,472            100.0
                            ==                    =======          ==========            =====

                                              1328 Broadway
                                              -------------
                         Number of             Total Leased                                %of
                      Tenants whose              Area in                              Gross Annual
           Year     lease will expire          Square Feet       Annual Rental           Rental
           ----     -----------------          -----------       -------------           ------
          <S>               <C>                   <C>             <C>                    <C>
           2000             90                     59,558          $1,439,745            23.1%
           2001             57                     69,572           1,684,857            27.0
           2002             14                     49,466           1,756,137            28.1
           2003              3                      3,625              77,144             1.2
           2004              1                      7,900             791,982            12.7
           2005              0                          0                   0             0.0
           2006              0                          0                   0             0.0
           2007              1                      3,165             491,572             7.9
           2008                                                             0             0.0
       2009 or later                                                        0             0.0
          Totals            166                   193,286          $6,241,437           100.0
                            ===                   =======          ==========           =====

</TABLE>

Item 3.  Legal  Proceedings.

         There are no material pending legal  proceedings to which Registrant is
a party or of which any of Registrant's property is the subject.

                                       11
<PAGE>

Item 4.  Submission of Matters to a Vote of Security Holders.

         No Matters were  submitted to a vote of holders of PPIs at a meeting or
otherwise during the fourth quarter of 1999.

                                     PART II

Item 5. Market for the Registrant's Participation Interests and Related Security
Holder Matters.

         As discussed above,  Registrant is a limited  partnership.  PPIs, which
represent the beneficial interest of the Registrant's sole Limited Partner,  are
traded in the over-the-counter  market on the National Association of Securities
Dealers Automated Quotations System ("NASDAQ") under the symbol "IVPA." There is
no regular market for these securities and quotations are limited and sporadic.

         The  range  of high  and low  closing  bid  quotations  for PPIs in the
over-the-counter market for the two most recent years was as follows:

                                1999                               1998
                                ----                               ----
                       High              Low              High             Low
                       ----              ---              ----             ---
First Qtr.             117                69               85            70 1/8
Second Qtr.            119 1/2           105               102           72 1/2
Third Qtr.             120               105               119           99 1/2
Fourth Qtr.            150               114               110           61

         The foregoing  over-the-counter  quotations  represent  prices  between
dealers,  do not include  retail  mark-up,  mark-down or commission  and may not
necessarily  represent actual transactions.  As of December 31, 1999, there were
526 holders of record of PPIs.

         Pursuant to the Partnership  Agreement,  Registrant is required to make
certain cash  distributions to holders of PPIs. Net operating  revenues for each
calendar year are  distributable to the partners of Registrant  approximately as
follows:


                                       12
<PAGE>

                    General Partners (as a group):                          .55%

                           Irving Schneider

                           Minlyn, Inc.

                           ScogBell AG, Inc. (formerly known as
                           Helmsley-Noyes Company, Inc.)

                           ScogBell

                  Converted Special L.P. Interest

                           ScogBell                                         .95%

                  Special Limited Partners (as a group):                  48.50%

                           ScogBell

                           Irving Schneider

                  Limited Partner (nominee for
                  holders of PPIs):                                        50.0%

         The  Limited  Partner is the  nominee  for the  holders of PPIs and all
distributions  to the Limited Partner are distributed  ratably to the holders of
820,000  Participation  Interests.  If with  respect  to any  calendar  year the
Limited Partner's distributive share (computed on the same basis as that used in
preparing  Registrant's  Federal  income  tax  return)  of income  (loss),  plus
one-half  of such  partner's  distributive  share of  long-term  capital  gains,
exceeds the net operating  revenue  allocated to the Limited Partner as referred
to in the preceding paragraph,  then Registrant must also distribute  additional
funds in an amount  equal to such excess to the holders of PPIs.  If  Registrant
does not have funds for such distribution (from cash on hand or borrowings), the
Partnership Agreement obligates the General Partners to lend or contribute funds
to Registrant for such purpose.


                                       13
<PAGE>

         In 1999,  Registrant had "net operating  revenues" of  $12,606,987,  of
which  $6,949,055 in the aggregate (or $8.47 per PPI) was  distributed  on March
31,  2000 to the  holders  of  record  of PPIs as of  December  31,  1999 and an
aggregate of $6,949,055 was also distributed to the Special Limited Partners and
General  Partners on that date.  See  "Management's  Discussion  and Analysis of
Financial Condition and Results of Operations."

         In 1998,  Registrant had "net operating revenues" (as defined below) of
$9,803,570,  of  which  $5,442,159  in the  aggregate  (or  $6.64  per  PPI) was
distributed  on March 31,  1999 to the  holders of record of PPIs as of December
31, 1998.  An aggregate of $5,442,159  was  distributed  to the Special  Limited
Partners and General  Partners  identified  above.  Accrued  distributions  with
respect to net  operating  revenues for 1994,  1995,  1996 and 1997  aggregating
$20,310,705 were paid to the General Partners and Special Limited  Partners,  in
1998 using the proceeds of the sale of the Chicago Properties. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations".

         "Net  operating  revenues"  is  defined  in  Registrant's   partnership
agreement as follows:  for any year, (i) net taxable  income of the  Registrant,
plus (ii)  depreciation  and  amortization  expenses  allowable  for  income tax
purposes during such year (but only to the extent of mortgage repayments), (iii)
plus  amortization  of Bond  issuance  costs  and Bond  discount  (which  is not
relevant  after  1994),  (iv) plus  amortization  of financing  costs,  (v) less
principal  repayments  on  mortgages.  In recent years,  cash  distributions  to
Registrant's  partners  have  generally  exceeded  the  amount  defined  as  net
operating revenues. See "Item 7" below.

                                       14
<PAGE>

Item 6.       Selected Financial Data.
<TABLE>
<CAPTION>

                                   1999                 1998                1997               1996               1995
                                   ----                 ----                ----               ----               ----
<S>                             <C>                  <C>                  <C>               <C>               <C>
Income Statement Data
Gross revenues from real        $ 31,640,834         $ 43,454,081         $46,463,473       $ 52,216,081      $53,879,055
estate

Net Income transferred to       $150,779,832         $112,747,733         $ 8,726,836       $  8,452,069      $ 9,331,341
Partner's capital accounts

Net operating revenues, as      $ 12,606,987         $  9,803,570         $ 9,174,787       $  8,342,911      $ 9,857,034
defined

Net income per PPI:             $    87.8823         $    60.4848         $    5.5280       $     5.8636      $    5.8446

Balance Sheet Data

Total assets                    $102,611,031         $ 49,762,234         $53,585,976       $ 55,393,657      $55,061,349

Mortgages payable               $  4,000,000         $ 23,847,488         $36,847,488       $ 40,314,558      $43,363,342

Affiliate Loans                 $         --         $         --         $18,000,000       $ 18,000,000      $18,000,000
</TABLE>
Item 7.  Management's  Discussion and Analysis of Financial  Condition and
         Results of Operations.

         Liquidity and Capital Resources:

         Historically, Registrant's income for operations has been sufficient to
provide for its expenses.  From time to time,  however,  Registrant has borrowed
funds to meet its short  term  liquidity  needs.  Registrant  believes  that its
properties are not overly  leveraged and that under normal market  conditions it
will be able to obtain additional  financing as needed.  The Registrant has sold
significant  assets  during 1999 and may sell assets in the future to  discharge
its obligations.

         On April 14, 1999,  Registrant sold the Mojud Building  located in Long
Island City,  New York for a sales price of $6,500,000.  In connection  with the
sale, Registrant paid sales


                                       15
<PAGE>

commissions of $162,500 to an affiliate of one of the General Partners and other
closing costs of approximately  $239,000.

         On May 18, 1999,  Registrant sold the Midland Savings  Building located
in Midland, Texas for a sales price of $300,000.

         On December 16, 1999, Registrant sold the 1440 Broadway property for
$152,000,000.  In connection  with the sale,  Registrant  repaid its outstanding
mortgage debt with Chase of  approximately  $17,347,500,  sales  commissions  of
$3,800,000 paid to an affiliate of one of the General partners and other closing
costs of approximately  $5,047,000.

         The  Registrant's  mortgage loan with Apple Bank pertaining to its 1328
Broadway  property  in New York City was  repaid in January  18,  2000 using the
proceeds from  Registrant's  sale of its 50% tenancy in common  interest in such
property.

         Registrant  is  required  to make  certain  cash  distributions  to its
partners for each year. See "Item 5." On December 16, 1999,  Registrant declared
a special  distribution to its partners of  approximately  $128,000,000 of which
$64,000,000  was paid to the General  Partners and Special  Limited  Partners in
December  1999 and  $64,000,000  was accrued  for the  holders of  Participation
Interests,  and was subsequently  paid in January 2000. In addition,  on January
18, 2000,  Registrant  declared a special  distribution  of  $37,000,000  to its
partners in connection with the sale on such date of  Registrant's  50% interest
in 1328  Broadway,  of which  $18,500,000  was paid to the General  Partners and
Special Limited Partners in January 2000 and $18,500,000 was paid to the holders
of PPIs in February 2000.

         Registrant anticipates satisfying its working capital requirements for
fiscal year 2000 generally  through cash from operations  and/or the sale of its
Properties.


                                       16
<PAGE>

         Net cash  provided by  operating  activities  was  approximately  $12.4
million in 1999,  as compared  to $9.4  million in 1998.  Such  increase in cash
provided  by  operating  activities  in  1999  was  primarily  due to  continued
improvement in the operations of  Registrant's  Properties in New York. Net cash
provided by investing  activities was  approximately  $148.2 million in 1999, as
compared to $115.6 million in 1998. Such increase was primarily  attributable to
a net increase in the proceeds  received  from the sales of  properties of $31.8
million.  Net cash used in financing  activities was approximately $94.7 million
in 1999, as compared to $113.4 million in 1998. Such decrease was due to the net
decrease in the repayment of indebtedness of approximately $11.2 million in 1999
and a net  decrease  in the  payment  of  distributions  of  approximately  $7.6
million.

         At December 31, 1998,  Registrant had outstanding mortgage indebtedness
in connection with its Chase Loans of $19,847,488  which was secured by three of
the New York  properties.  The Chase  Loans bore  interest  at LIBOR plus 2.25%.
Through September 15, 1999,  Registrant made scheduled repayments of $2,500,000.
On December 16,  1999,  Registrant  repaid the  remaining  principal  balance of
$17,347,488 using the proceeds from the sale of the 1440 Broadway property.

         Registrant is also  obligated for one-half of the  $8,000,000  mortgage
payable to Apple Bank which bears interest at 8.5% and which had a maturity date
of April  30,  1999.  Registrant  repaid  its  $4,000,000  share of such loan on
January 18, 2000 using the  proceeds  from the sale of its  interest in the 1328
Broadway property.

         Impact of Year 2000:

         In prior  years,  Registrant  discussed  the nature and progress of its
plans to become Year 2000 ready,  and reported  that it had been informed by its
vendors that each had developed a


                                       17
<PAGE>

plan to address the affected informational  (accounting,  billing,  payroll) and
operational (HVAC, fire alarms,  security,  elevators,  and lighting) systems of
Registrant. As a result of those planning and implementation efforts, Registrant
experienced no significant  disruptions  in information  technology  systems and
non-information  technology  systems and  believes  those  systems  successfully
responded to the Year 2000 date change.  Registrant is not aware of any material
problems arising from Year 2000 issues,  either with its internal systems or the
products and services of third parties.  Registrant will continue to monitor its
mission  critical  computer  applications and those of its suppliers and vendors
throughout  the Year 2000 to ensure that any latent Year 2000  matters  that may
arise are addressed promptly. The cost of Registrant's  compliance for Year 2000
matters was not  material.

         Results of Operations:

1999 Compared to 1998

         Gross   revenues   from  rentals  for  1999   decreased   approximately
$11,813,000  (approximately 27%) as compared to 1998, primarily due to decreases
in revenue  due to the  impact of the sale of the  Chicago  Properties  (sold in
September 1998) and the sale of the Mojud Building (sold in April 1999),  offset
in part by increases in revenue from Registrant's other New York properties. Net
income for 1999 increased approximately $38,032,000 primarily due to an increase
of $35,139,000 in the gain on sale of  properties.  Total expenses  decreased by
approximately  $14,764,000  (approximately  45%) as a result  of the sale of the
Chicago Properties in September 1998 and the Mojud Building in April 1999.

         During 1999,  Registrant's rental income was generated primarily by the
operations of its New York  properties.  Leasing  activity remains active in New
York and  Registrant  anticipates  continuing  its practice of  negotiating  new
leases and renewing existing leases upon their


                                       18
<PAGE>

expiration;  however,  there is no assurance that some of  Registrant's  tenants
will not go out of business,  reduce their space  requirements or relocate.

         For  1999,   Registrant's  interest  expense  decreased   approximately
$2,166,000  (approximately  56%),  primarily  due to  lower  levels  of  average
outstanding  indebtedness  during 1999 which  resulted from  mortgage  principal
repayments of $13,000,000  made in 1998 and the repayments of Affiliate Loans of
$18,000,000 made in 1998. In addition, Registrant repaid the outstanding balance
of its mortgage loan with Chase in December 1999.

         Registrant's  real estate tax expense in 1999  decreased  approximately
$2,515,000  (approximately  35%),  due to the sale of the Chicago  Properties in
September  1998 and the sale of the Mojud  building in April  1999.  Registrant,
under certain  commercial  leases, is able to pass a portion of the increases in
real estate taxes,  operating expenses and increases in the consumer price index
to the tenants based on lease escalation clauses.

         Management fees decreased  approximately $605,000  (approximately 54%),
due to the sale of the Chicago  Properties in September 1998 and the sale of the
Mojud building in April 1999.

         Payroll  and  related  expenses  decreased   approximately   $2,323,000
(approximately 55%), due to the sale of the Chicago Properties in September 1998
and the sale of the Mojud building in April 1999.

         Repairs and maintenance  expenses  decreased  approximately  $1,357,000
(approximately 43%), due to the sale of the Chicago Properties in September 1998
and the sale of the Mojud building in April 1999.


                                       19
<PAGE>

         Other   property   expenses    decreased    approximately    $4,550,000
(approximately 54%), due to the sale of the Chicago Properties in September 1998
and the sale of the Mojud building in April 1999.

         Administrative expenses increased approximately $283,000 (approximately
91%), due to increased  professional fees associated with the  administration of
partnership activities and increased regulatory filing requirements.

         Depreciation  and   amortization   expenses   decreased   approximately
$1,098,000  (approximately  28%),  due to the sale of the Chicago  Properties in
September 1998 and the sale of the Mojud building in April 1999.

1998 Compared to 1997

         Gross revenues from rentals for 1998 decreased approximately $3,009,000
(approximately 7%) as compared to 1997, primarily due to decreases in revenue as
a result of the sale of the Chicago  Properties  offset in part by  increases in
revenue from  Registrant's  New York  properties.  Net income for 1998 increased
approximately  $104,000,000 primarily due to the sale of the Chicago Properties.
Total  expenses  decreased  by  approximately  $5,294,000   (approximately  15%)
primarily as a result of decreases in leasehold rentals,  interest,  real estate
taxes,   repairs  and  maintenance  and  other  property   operating   expenses,
attributable to the sale of the Chicago Properties in September 1998.

         During  1998,  approximately  8 tenants in various  properties  with an
aggregate  annualized  rental of  approximately  $236,000 vacated their premises
prior to the  expiration of their leases.  While leasing  activity had been more
active in New York, it remained  relatively flat in Newark.  Although Registrant
anticipated continuing its practice of negotiating new leases and


                                       20
<PAGE>

renewing existing leases upon their expiration, there was no assurance that some
of  Registrant's  tenants  would  not go out of  business,  reduce  their  space
requirements  or relocate.

         For 1998 Registrant's interest expense decreased approximately $848,000
(approximately  18%),  primarily  due to lower  levels  of  average  outstanding
indebtedness  resulting from mortgage  principal  repayments of $13,000,000  and
repayments of Affiliate Loans of $18,000,000.

         Registrant's  real estate tax expense in 1998  decreased  approximately
$2,269,000  (approximately  24%),  primarily  due to  the  sale  of the  Chicago
Properties in September 1998.  Registrant,  under certain commercial leases, was
able to pass a portion of the increases in real estate taxes, operating expenses
and  increases  in the  consumer  price  index  to the  tenants  based  on lease
escalation clauses.

         Management fees decreased  approximately $251,000  (approximately 18%),
primarily  due  to the  sale  of  the  Chicago  Properties  in  September  1998.
Depreciation  expenses decreased  approximately  $658,000  (approximately  14%),
primarily due to the sale of the Chicago Properties in September 1998.


Item 7A. Disclosures About Market Risk.

         Upon the repayment of all of its variable rate mortgage indebtedness in
December  1999,  Registrant has  significantly  reduced its exposure to interest
rate risk. At December 31, 1999, Registrant's sole interest bearing indebtedness
related to its  obligation  for one-half of the $8 million  mortgage  payable to
Apple Bank which  bears  interest at a fixed rate of 8 1/2 percent and which had
matured  on April 30,  1999.  Registrant  repaid  its $4  million  share of such
obligation  on  January  18,  2000 using the  proceeds  from the sale of its 50%
tenancy in common


                                       21
<PAGE>

interest of the 1328 Broadway property which secured such  indebtedness.  Should
Registrant elect to refinance any of its remaining properties,  Registrant would
seek to manage  its  interest  rate risk  through  the use of fixed rate debt or
interest rate  derivatives  in conjunction  with variable rate debt.  Registrant
believes that it can refinance its properties at commercially  reasonable rates,
although there can be no assurances in this regard.


Item 8.  Financial Statements and Supplementary Data.
         The response to this Item is  submitted  in a separate  section of this
         report.


Item 9.  Changes in and Disagreements With Accountants on
         Accounting and Financial Disclosure.

          None.

                                    PART III

Item 10. General Partners of the Registrant.

         (a)  (b)  Identification of General Partners.

         Registrant  is a limited  partnership.  It does not have  directors  or
executive officers.  The information set forth below is provided with respect to
the  General  Partners  of the  Registrant,  who  may be  considered  to  occupy
positions  equivalent to directors or executive  officers.  There is no specific
term of office for any General Partner of the Registrant.  Each General Partner,
with the exception of ScogBell,  has served in such capacity  since  December 4,
1969.

         The names, ages, and business  experience during the past five years of
the two individual General Partners of the Registrant, including their principal
occupations  and


                                       22
<PAGE>

employment  during  that  period  and the name  and  principal  business  of any
corporation or other  organization in which such occupations and employment were
carried on, is as follows:

         Irving Schneider - 80; Executive Vice President of Helmsley-Spear, Inc.
Mr.  Schneider  has been in the real estate  business for over 50 years and owns
and  operates,  individually  or  through  partnerships,  numerous  real  estate
investments.

         Minlyn,  Inc.  was  formed  in 1968.  All of its  stock is owned by Mr.
Schneider.  Mr.  Schneider is a director of Reliance  Group  Holdings,  Inc. and
Reliance  Insurance  Company.

         Registrant  has been advised that  ScogBell was created in June 1998 to
acquire, hold, finance and sell interests in Registrant.  Control of ScogBell is
vested exclusively with ScogBell AG Manager, Inc. and ScogBell SB Manager, Inc.,
as managers.

         ScogBell AG, Inc. (formerly known as Helmsley-Noyes Company, Inc.), was
incorporated  in 1926. It is a real estate  management firm in New York City. It
was  acquired by  ScogBell on June 10,  1998.

         Harry B. Helmsley was a General  Partner of Registrant  until his death
on  January  4, 1997.  He was  succeeded  by H  Associates  on July 3,  1997.  H
Associates  acquired a nominal  general  partner  interest  from  Helmsley-Noyes
Corporation in connection with its admission as a General  Partner.  On June 10,
1998, H Associates ceased to be a General Partner of Registrant and was replaced
by ScogBell  as a General  Partner  pursuant to a sale of its entire  beneficial
ownership position. See "Business."

Item 11. Executive Compensation.

         Registrant  is a  limited  partnership.  It  does  not  have  officers,
executive  officers or directors.  The  information  set forth below is provided
with  respect to the General  Partners and the Special  Limited  Partners of the
Registrant,  who may be considered to act in capacities similar


                                       23
<PAGE>

to directors,  or perform policy-making  functions similar to those of executive
officers  or  officers  in charge of a  principal  business  unit,  division  or
function.

         Paragraph  11A(3) of the  Partnership  Agreement  provides  for certain
guaranteed  payments to be made to the  General  Partners  and  Special  Limited
Partners of Registrant  equal to 8-3/4% per annum of their  "Remaining  Original
Cash Contribution." The Remaining Original Cash Contribution is $1,500,000, less
the cumulative  amounts  distributed to the General Partners and Special Limited
Partners  from  time to time in  respect  of the net  proceeds  from the sale of
Registrant's properties. The Remaining Original Cash Contribution as of December
31,  1999  was  $1,160,000.  For the  fiscal  years  ended  December  31,  1999,
Registrant  paid or  accrued,  pursuant  to such  paragraph  11A(3),  guaranteed
payments to the General and Special Limited  Partners in an aggregate  amount of
$101,500 as follows:  Irving Schneider - $33,732,  ScogBell - $67,576,  ScogBell
AG, Inc. (formerly known as Helmsley-Noyes Company, Inc.) - $91 and Minlyn, Inc.
- $101.

         Under the terms of the  Partnership  Agreement,  since January 1, 1973,
the General  Partners are entitled to receive an annual payment equal to 1/2% of
the gross  revenue  from real estate of the  Registrant.  During the fiscal year
ended  December  31, 1999,  Registrant  accrued in  connection  with such annual
payments  an  aggregate  of $154,222  as  follows:  Irving  Schneider - $46,266,
ScogBell AG, Inc.  (formerly known as  Helmsley-Noyes  Company,  Inc.) - $4,627,
ScogBell - $98,189 and Minlyn,  Inc. - $5,140.  Mr.  Schneider  and ScogBell are
entitled to receive  distributions  of net  operating  revenues in each of their
respective  capacities  as Special  Limited  Partners.  See "Item 5" above.

         The  Registrant  does  not  provide  any  compensation  to the  General
Partners or the other persons in the form of option or stock  appreciation right
grants,  long-term incentive plans,


                                       24
<PAGE>

or a  defined  benefit  or  actuarial  plans.  The  Registrant  has no  standard
arrangements  for  payment of fees to  General  Partners  (other  than for their
interest as General Partners,  as described  above), or employment  contracts or
change-of-control agreements.


Item 12.  Security Ownership of Certain
          Beneficial Owners and Management.

         (a) Registrant is a limited partnership. Except to the extent set forth
below, it does not have voting securities.  The right to control the business of
Registrant  is  vested  in the  General  Partners  of  Registrant  by  virtue of
provisions  of  the  Partnership  Agreement  and  Article  8A of  the  New  York
Partnership  Law.

         The Partnership  Agreement  provides for  modification or amendments of
the  Partnership  Agreement upon obtaining the consents or affirmative  votes of
specified  percentages of the Special Limited Partners and the Limited Partners,
each  voting as a class.  The sole  limited  partner  votes as  directed  by the
holders of PPIs.


                                       25
<PAGE>

         To the extent that the Special Limited  Partnership  Interests and PPIs
are considered voting  securities,  the following  information is provided as to
holders of 5% or more of each such class at December 31, 1999:

<TABLE>
<CAPTION>

                                                                Amount and
                                                                nature of
                                    Name and Address of         Beneficial       Percent
Title of Class                      Beneficial Owner            Ownership        of Class
--------------                      ----------------            ---------        --------
<S>                                 <C>                         <C>               <C>
Special Limited                     ScogBell                    Direct            66.66
Partnership Interests               660 Madison Ave.
                                    New York, NY  10021
                                    As a group

Special Limited                     Irving Schneider            Direct            33.34
Interests                           880 Fifth Avenue
                                    New York, NY

Converted Special                   ScogBell                    Direct           100.00
Limited Partnership Interests       660 Madison Ave.
                                    New York, NY  10021

PPIs                                ScogBell                   310,927(1)         37.92
                                    660 Madison Ave.
                                    New York, NY  10021

                                    Irving Schneider           90,095             10.99
                                    880 Fifth Avenue           Direct(2)
                                    New York, NY
</TABLE>
----------
(1)   Includes PPIs purchased from the following: 258,877 PPIs owned directly by
      Leona M. Helmsley;  also 4,000 PPIs held by Helmsley-Noyes  Company,  Inc.
      (0.5%), a company owned by Helmsley  Enterprieses,  Inc., which in turn is
      wholly-owned  by the Harry B. Helmsley  Revocable  Trust,  under agreement
      dated December 13, 1989;  13,000 PPIs held by HBH Holdings  Corp.  (1.6%),
      6,500 PPIs held by Park Lane  Hotel,  Inc.  (0.8%) and 28,550  PPIs in the
      over-the-counter market.

(2)   Does not include 31,960 PPIs owned by Mr. Schneider's daughters (3.9%).



                                       26
<PAGE>

         (b) Registrant is a limited  partnership  and, as such, its affairs are
managed by its General  Partners.  The following table sets forth the amount and
nature  of the  beneficial  ownership  at  December  31,  1999 of each  class of
partnership interests by its General Partners individually and as a group:

<TABLE>
<CAPTION>

                                                                Amount and
                                                                nature of
                                    Name and Address of         Beneficial       Percent
Title of Class                      Beneficial Owner            Ownership        of Class
--------------                      ----------------            ---------        --------
<S>                                 <C>                         <C>               <C>
General Partnership                 Irving Schneider
Interests                           880 Fifth Avenue
                                    New York, NY                Direct(1)         90.91

                                    ScogBell                    Indirect           9.09
                                    660 Madison Ave.
                                    New York, NY  10021

                                    As a group                                   100.00

Special Limited                     ScogBell                    Direct(2)         66.66
Partnership Interests               660 Madison Ave.
                                    New York, NY  10021

                                    Irving Schneider            Direct(2)         33.34
                                    880 Fifth Avenue
                                    New York, NY

                                    As a group                                   100.00
</TABLE>
----------
(1)   Mr. Irving Schneider owns approximately 90% of such interest directly and
      10% indirectly through his ownership of Minlyn, Inc.; 60 East 42nd Street,
      New York, New York, which is also a General Partner of Registrant.

(2)   The Special Limited Partnership Interests have the rights set forth in the
      Partnership Agreement and are not securities issued by Registrant. The
      Converted Special L.P. Interest represents the economic interest in
      Registrant formerly owned by Harry B. Helmsley in his capacity as a
      General Partner. See "Business."


                                       27
<PAGE>

<TABLE>
<CAPTION>

                                                                Amount and
                                                                nature of
                                    Name and Address of         Beneficial       Percent
Title of Class                      Beneficial Owner            Ownership        of Class
--------------                      ----------------            ---------        --------
<S>                                 <C>                         <C>               <C>
Converted Special
 Limited Partner Interests          ScogBell                    Direct           100.00
                                    660 Madison Ave.
                                    New York, NY  10021

Participation Interests             ScogBell                    310,927           37.92
                                    660 Madison Ave.
                                    New York, NY  10021         Direct(3)

                                    Irving Schneider            90,095            10.99
                                    880 Fifth Avenue            Direct(4)
                                    New York, NY
                                    As a group                  401,022(2)(4)     48.91

Item 13. Certain Relationships and Related
         Transactions.

         (a) Transactions with Management and Others.

         (b) Certain Business Relationships.

         As set forth in Item 11(a)  above,  during the year ended  December 31,
1999,  Registrant paid certain fees and certain  guaranteed  payments to each of
its  corporate   General  Partners,   ScogBell  AG,  Inc.   (formerly  known  as
Helmsley-Noyes  Company,  Inc.) and Minlyn,  Inc.,  pursuant to the  Partnership
Agreement. See Item 10 hereof as to the ownership of said corporations.

</TABLE>
----------
(3)   Includes PPIs purchased from the following: 258,877 PPIs owned directly by
      Leona M. Helmsley;  also 4,000 PPIs held by Helmsley-Noyes  Company,  Inc.
      (0.5%), a company owned by Helmsley  Enterprieses,  Inc., which in turn is
      wholly-owned  by the Harry B. Helmsley  Revocable  Trust,  under agreement
      dated December 13, 1989;  13,000 PPIs held by HBH Holdings  Corp.  (1.6%),
      6,500 PPIs held by Park Lane  Hotel,  Inc.  (0.8%) and 28,550  PPIs in the
      over-the-counter market.

(4)   Does not include 31,960 PPIs owned by Mr. Schneider's daughters (3.9%).


                                       28
<PAGE>

    HSI, either directly or through various subsidiaries,  acts as managing
agent of the Properties. For such management and leasing brokerage services, HSI
charged  Registrant  the aggregate sum of  approximately  $1,288,000  during the
fiscal year ended  December 31,  1999.  Leasing  commissions  charged by HSI are
based upon varying  percentages  of the annual rent paid by tenants  obtained by
HSI. Property  management fees charged by HSI are based upon negotiated  amounts
that are  believed  to be below  market  rate.  Leasing  fees  charged by HSI to
Registrant are believed to be, from  Registrant's  perspective,  on a basis that
approximate  those that would be available to Registrant from  non-affiliates at
arm's-length.  In 1999, HSI also earned  $3,962,500 in brokerage  commissions in
connection with the sale of the Mojud and 1440 Broadway  properties.  The amount
of the  commissions  paid for such  services is believed by  Registrant to be no
more than the amount  which  Registrant  would be required  to pay to  unrelated
parties performing such services.


          (c)  Indebtedness  of  Management.

               None.

                                     PART IV

Item  14. Exhibits,Financial Statement

          Schedules, and Reports on Form 8-K.

         (a) (1) and (2) The response to this portion of Item 14 is submitted as
a separate section of this report.

         (a) (3) Exhibits.  Subject to Rule 12b-32 of the Securities Act of 1934
regarding  incorporation  by reference,  listed below are the exhibits which are
filed as part of this report and are hereby incorporated by reference (according
to the  numbers  assigned  to them  in  Item  601 of  Regulation  S-K):


                                       29
<PAGE>

      (3) (i)  Registrant's  Limited  Partnership  Agreement dated as of May 15,
               1969,  as  amended on October 2,  1969,  October  31,  1969,  and
               December 3, 1969 is hereby  incorporated by reference to Exhibits
               3.1, 3.2, 3.3 and 3.4 to Registration Statement No. 2-33132 which
               was declared effective by the SEC on December 4, 1969.

         (ii)  Amendment to Agreement  of Limited  Partnership,  dated as of May
               30, 1997.

      (10.1)   Management  Agreement dated May 20, 1969 between  Helmsley-Spear,
               Inc.  and  Registrant  is hereby  incorporated  by  reference  to
               Exhibit 12.1 to Registration  Statement No. 2-33132.  The leasing
               commissions  and management  fees currently  being charged to the
               Registrant are consistent with the rates generally charged in the
               areas where the properties are located.

      (10.2)   Forms of Promissory  Notes,  dated November 30, 1994,  evidencing
               the  Affiliate  Loans is  hereby  incorporated  by  reference  to
               Exhibit 10.2 of  Registrant's  Report on Form 10-K for the fiscal
               year ended December 31, 1994.


                                       30
<PAGE>

      (b)     Reports  on Form 8-K  filed  during  the  period  covered  by this
              Report:

              (i)    On October 7, 1999,  Registrant  filed a Current  Report on
                     Form 8-K  relating to the  contract to sell 1440  Broadway,
                     New York, New York for $152,000,000.

              (ii)   On December 17, 1999,  Registrant filed a Current Report on
                     Form 8-K  relating to the  contract to sell 1328  Broadway,
                     New York, New York for $43,500,000.

      (c)     Financial  Statement  Schedules -- The response to this portion of
              Item 14 is  submitted as a separate  section of this report.

      (27)    Financial Data Schedule.


                                       31

<PAGE>

                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on its
behalf by the  undersigned,  thereunto duly  authorized.

                                                INVESTMENT PROPERTIES ASSOCIATES

                                                By: /s/ Irving Schneider
                                                    ----------------------------
                                                      Irving Schneider
                                                      General Partner

Dated:  April 14, 2000

         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the date first indicated above.


/s/ Irving Schneider
------------------------------------------------      General Partner,
Irving Schneider                                      Principal Executive,
                                                      Financial and
                                                      Accounting Officer

MINLYN, INC.                                          General Partner


By: /s/ Irving Schneider
    --------------------------------------------
         Irving Schneider
         President

SCOGBELL AG, INC.                                     General Partner


By: /s/ Craig Effron
    --------------------------------------------
         Craig Effron
         President


SCOGBELL ACQUISITION, L.L.C.                          General Partner


By: /s/ Craig Effron
    --------------------------------------------
         President
         ScogBell AG Manager, Inc., Manager


                                       32
<PAGE>

         The following is an index to all exhibits  filed with this report other
than those incorporated by reference herein:


Exhibit
Number   Description
------   -----------

27       Financial Data Schedule



                                       33
<PAGE>

                           Annual Report On Form 10-K

                      Item 14(A)(1) And (2) And Item 14(D)

          List Of Financial Statements And Financial Statement Schedule

              Financial Statements And Financial Statement Schedule

                          Year Ended December 31, 1999

                        Investment Properties Associates
                        (A New York Limited Partnership)

                               New York, New York


<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)



         Index Of Financial Statements And Financial Statement Schedule


The  following  financial  statements of Investment  Properties  Associates  are
included in Item 8:

                                                                            Page

Report of Independent Auditors ............................................. S-1
Balance Sheets-December 31, 1999 and 1998 .................................. S-2
Statements of Income-Years Ended December 31, 1999,
 1998 and 1997 ......................................................S-3 and S-4
Statements of Changes in Partners' Capital (Deficiency)-
 Years Ended December 31, 1999, 1998 and 1997 .............................. S-5
Statements of Cash Flows-Years Ended December 31, 1999,
 1998 and 1997 ............................................................. S-6
Notes to Financial Statements....................................... S-7 to S-20

The following financial statement schedule of Investment  Properties  Associates
is  included  in  Item  14(d):

Schedule III-Real Estate and Accumulated Depreciation ............ S-21 and S-22

All other  schedules for which  provision is made in the  applicable  accounting
regulation of the Securities and Exchange  Commission are not required under the
related  instructions,  are inapplicable or have been otherwise  disclosed,  and
therefore have been omitted.


<PAGE>

                         Report of Independent Auditors

Investment Properties Associates

We have  audited  the  accompanying  balance  sheets  of  Investment  Properties
Associates  (a New York Limited  Partnership)  as of December 31, 1999 and 1998,
and the related statements of income,  changes in partners' capital (deficiency)
and cash flows for each of the three  years in the  period  ended  December  31,
1999. Our audits also included the financial  statement  schedule  listed in the
index at Item 14. These financial statements and schedule are the responsibility
of the Partnership's management.  Our responsibility is to express an opinion on
these financial statements and schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,   the  financial  position  of  Investment   Properties
Associates at December 31, 1999 and 1998,  and the results of its operations and
its cash flows for each of the three  years in the  period  ended  December  31,
1999, in conformity with accounting  principles generally accepted in the United
States.  Also, in our opinion,  the related financial statement  schedule,  when
considered  in  relation  to the basic  financial  statements  taken as a whole,
presents fairly in all material respects the information set forth therein.


                                                /s/ ERNST & YOUNG LLP

New York, New York
March 31, 2000, except
for Note 14 as to which the
date is April 12, 2000


                                      S-1
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                                 Balance Sheets

<TABLE>
<CAPTION>
                                                        December 31,
                                                1999                    1998
                                           -------------------------------------
Assets

<S>                                        <C>                      <C>
Real estate, at cost (Notes 3 and 5)       $ 40,649,960             $68,589,793
   Less accumulated depreciation and
     amortization                            26,391,697              44,261,629
                                           ------------------------------------
                                             14,258,263              24,328,164

Cash and cash equivalents                    79,770,013              13,831,031

Due from managing agent (Helmsley-
  Spear Inc.) including tenants' security
   deposits of $1,963,001 (1999) and
    $1,614,898 (1998) (Note 6)                2,822,168               2,375,753

Receivables, principally for rentals            332,926                 471,968
Deferred rent receivable                        134,306               1,045,707

Deferred charges, including deferred
   leasing commissions of $2,115,053
   (1999) and $3,399,132 (1998)
   (Note 6)                                   5,293,355               7,709,611

                                           ------------------------------------
Total assets                               $102,611,031            $ 49,762,234
                                           ====================================

Liabilities and partners' capital
(deficiency)

Accounts payable                           $    678,177            $  1,155,069
Accrued real estate taxes                     1,480,861               3,067,023
Accrued interest                                 29,278                 155,025

Distributions payable to General Partners,
   Special Limited Partners and Limited
   Partner (Note 9)                          77,979,781              10,884,318
Guaranteed payments due to General
   Partners, Special Limited Partners and
   Limited Partner (Note 7)                     300,721                 700,828
Accrued leasing commissions and
   management fees due to Helmsley-
   Spear, Inc. (Note 6)                         231,113                 291,405
Sundry and accrued liabilities                  610,712               1,079,965
Mortgages payable (Note 5)                    4,000,000              23,847,488
Deposits, and rents received in advance of
   $85,406 (1999) and $255,641 (1998)         1,696,853               1,859,300
                                           ------------------------------------
Total liabilities                          $ 87,007,496              43,040,421
                                           ------------------------------------
Commitments and contingencies
   (Note 10 and 13)

Partners' capital (deficiency)
   (Notes 1, 7, 8 and 9):
     General Partners                        (2,683,508)             (2,768,948)
     Special Limited Partners               (13,643,808)            (21,325,648)
     Limited Partner (represented by
       the equivalent of 820,000
       Participation Interests)              31,930,851              30,816,409
                                           ------------------------------------
                                             15,603,535               6,721,813
                                           ------------------------------------
Total liabilities and partners'
   capital (deficiency)                    $102,611,031            $ 49,762,234
                                           ====================================
</TABLE>

See accompanying notes.


                                      S-2
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                              Statements of Income

<TABLE>
<CAPTION>
                                                             Year ended December 31,
                                                    1999               1998            1997
                                                -----------------------------------------------
<S>                                             <C>              <C>                <C>
Revenues:
Gross revenues from real estate (Note 11)       $ 31,640,834      $43,454,081       $46,463,473
Interest and other income                            798,599          917,010         1,144,284
                                                -----------------------------------------------
                                                  32,439,433       44,371,091        47,607,757
Expenses:
  Leasehold rentals                                       --          409,095           563,446
  Real estate taxes                                4,633,769        7,149,045         9,418,042
  Interest (Notes 4 and 5)                         1,676,492        3,842,192         4,690,344
  Management fees (Note 6)                           517,005        1,121,955         1,373,436
  Payroll and related expenses                     1,898,115        4,220,947         5,026,993
  Repairs and maintenance expenses                 1,783,373        3,139,757         2,928,374
  Other property expenses                          3,914,440        8,463,862         9,645,887
  Administrative expenses                            592,736          309,626           239,602
  Co-owners' share of (expense) income                    --           25,027            60,817
  Depreciation and amortization of real estate     1,974,245        2,781,850         3,349,946
  Amortization of leasing commissions                831,865        1,100,072         1,122,721
  Amortization of mortgage refinancing costs           1,593           24,323            91,775
                                                -----------------------------------------------
                                                  17,823,633       32,587,751        38,511,383
                                                -----------------------------------------------
Income before items shown below                   14,615,800       11,783,340         9,096,374

Gain (loss) on sales of real estate (Note 3)     136,434,754      101,295,596           (14,913)
                                                -----------------------------------------------
Income before guaranteed payments required
  under the  Limited Partnership agreement      $151,050,554     $113,078,936       $ 9,081,461
</TABLE>

See accompanying notes.


                                      S-3
<PAGE>


                        Investment Properties Associates
                        (A New York Limited Partnership)

                        Statements of Income (continued)

<TABLE>
<CAPTION>
                                                               Year ended December 31,
                                                     1999               1998              1997
                                                -----------------------------------------------
<S>                                             <C>              <C>                <C>
Guaranteed payments required under the
  Limited Partnership agreement (Note 7):
     To the Limited Partner                     $     15,000    $      15,000        $   15,000
     To General and Special Limited Partners         101,500          101,500           101,500
     To General Partners                             154,222          214,703           238,125
                                                -----------------------------------------------
                                                     270,722          331,203           354,625
                                                -----------------------------------------------

Net income                                      $150,779,832    $ 112,747,733        $8,726,836
                                                ===============================================

Net income allocable as follows (Note 8):

General Partners                                $    865,880          694,652            40,829

Special Limited Partners                          77,850,455       62,455,572         4,153,067

Limited Partner                                   72,063,497       49,597,509         4,532,940
                                                ===============================================
                                                $150,779,832     $112,747,733        $8,726,836
                                                ===============================================
Net Income Per Limited Partner Participation
  Interest (820,000 units outstanding):         $    87.8823     $    60.4848        $   5.5280
                                                ===============================================
</TABLE>

See accompanying notes.


                                      S-4
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

             Statements of Changes in Partners' Capital (Deficiency)
<TABLE>
<CAPTION>

                                                                                 Special Limited
                                                    Total      General Partners       Partners     Limited Partners
                                                -------------------------------------------------------------------
<S>                                             <C>               <C>              <C>                  <C>
Partners' Capital (Deficiency)
  December 31, 1996                             $(36,849,945)     $(8,388,913)     $(44,098,397)        $15,637,365

Reclassification of General Partner
  interest (Note 1)                                       --        5,312,950        (5,312,950)                 --
Distribution to General Partners,
  Special Limited Partners and Limited
  Partner (Note 9)                                (9,847,784)         (54,163)       (4,869,729)         (4,923,892)
Net income for the year ended
  December 31, 1997 (Note 8)                       8,726,836           40,829         4,153,067           4,532,940
                                                -------------------------------------------------------------------
Partners' Capital (Deficiency)
  December 31, 1997                              (37,970,893)      (3,089,297)      (50,128,009)         15,246,413
Distribution to General Partners,
  Special Limited Partners and Limited
  Partner (Note 9)                               (68,055,027)        (374,303)      (33,653,211)        (34,027,513)
Net income for the year ended
  December 31, 1998 (Note 8)                     112,747,733          694,652        62,455,572          49,597,509
                                                -------------------------------------------------------------------
Partners' Capital (Deficiency)
  December 31, 1998                                6,721,813       (2,768,948)      (21,325,648)         30,816,409

Distribution to General Partners,
  Special Limited Partners and Limited
  Partner (Note 9)                              (141,898,110)        (780,440)      (70,168,615)        (70,949,055)
Net income for the year ended December
  31, 1999 (Note 8)                              150,779,832          865,880        77,850,455          72,063,497
                                                ===================================================================
Partners' Capital (Deficiency) December
  31, 1999                                      $ 15,603,535      $(2,683,508)     $(13,643,808)        $31,930,851
                                                ===================================================================
</TABLE>

See accompanying notes.


                                      S-5
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                            Statements of Cash Flows


<TABLE>
<CAPTION>
                                                                              Year ended December 31,
                                                                   1999                 1998                 1997
                                                               ----------------------------------------------------
<S>                                                            <C>                 <C>                  <C>
Operating activities:
Net income                                                     $  150,779,832      $112,747,733         $ 8,726,836
Adjustments to reconcile net income to net cash
   provided by operating activities:
Depreciation and amortization                                       2,807,703         3,906,245           4,564,442
Deferred rent                                                      (1,082,359)       (1,045,707)          -
Loss (gain) on sale of real estate                               (136,434,754)     (101,295,596)             14,913
Changes in operating assets and liabilities:
Due from managing agent                                              (446,415)          337,226            (631,394)
Receivables, net                                                      139,042           987,957             (16,349)
Deferred charges, net                                                (121,133)       (3,077,192)         (3,304,107)
Accounts payable                                                     (476,892)       (1,055,285)           (544,867)
Accrued real estate tax                                            (1,586,162)       (1,817,833)            254,271
Accrued interest                                                     (125,747)         (238,119)             (3,009)
Guaranteed payments due to General Partners
   Special Limited Partners and Limited Partner                      (400,107)          316,203              (8,375)
Accrued leasing commissions and management fees                       (60,292)         (480,943)           (443,667)
Sundry and accrued liabilities                                       (469,253)          232,297            (982,367)
Deposits and rents received in advance                               (162,447)         (122,489)             35,150
                                                               ----------------------------------------------------
Net cash provided by operating activities                          12,361,016         9,394,497           7,661,477
Investing activities:
Property improvements                                              (1,371,534)       (2,201,413)          2,208,474)
Net proceeds from sale of real estate                             149,599,635       117,803,063           -
                                                               ----------------------------------------------------
Net cash provided by (used in) investing activities               148,228,101       115,601,650          (2,208,474)
                                                               ----------------------------------------------------

Financing activities:
Distributions to General Partners, Special Limited
   Partners and Limited Partner                                   (74,802,647)      (82,405,306)         (5,374,588)
Principal payments on mortgages payable                           (19,847,488)      (13,000,000)         (3,025,816)
Principal payments on notes payable to related parties             -                (18,000,000)          -
                                                               ----------------------------------------------------
Net cash used in financing activities                          $  (94,650,135)     (113,405,306)         (8,400,404)
                                                               ----------------------------------------------------

Increase (decrease) in cash and cash equivalents                   65,938,982        11,590,841          (2,947,401)
Cash and cash equivalents at beginning of year                     13,831,031         2,240,190           5,187,591
                                                               ====================================================
Cash and cash equivalents at end of year                       $   79,770,013      $ 13,831,031         $ 2,240,190
                                                               ====================================================

Supplemental disclosure of cash flow information
Cash paid during the year for interest                         $    1,802,239      $  4,080,311         $ 4,693,353
                                                               ====================================================

Supplemental disclosure of non-cash investing and
   financing activities:
   Deferred rent receivable charged to cost of sales           $    1,993,760                --                  --
   Deferred leasing commissions charged to cost of sales            1,703,931                --                  --
</TABLE>

See accompanying notes.


                                      S-6
<PAGE>


                        Investment Properties Associates
                        (A New York Limited Partnership)

                          Notes to Financial Statements

                                December 31, 1999


1.    Description of Business

Investment  Properties Associates ("IPA") was formed as a limited partnership on
May 15, 1969 to acquire and operate  commercial  properties.  Through January 4,
1997,  the General  Partners of IPA were Mr. Harry B.  Helmsley  and Mr.  Irving
Schneider and two corporations  owned or controlled by them.  Collectively,  the
General Partners owned a 1.5% interest in IPA. Upon the death of Mr. Helmsley on
January 4, 1997, the general  partnership  interest  owned by him  automatically
converted to a Special Limited  Partnership  Interest owned by his estate.  As a
result of this  conversion,  the total  interests of the General  Partners  were
reduced to .55%. The Special  Limited  Partners are Mrs. Leona M. Helmsley,  Mr.
Irving  Schneider,  and the  Estate of Mr.  Harry B.  Helmsley  and the  Limited
Partner is Mr. John Bailey.  Undivided  interests in the limited partnership are
represented by 820,000 Participation  Interests ("PPI's").  Changes in ownership
subsequent to January 4, 1997, are described below.

Under  the  terms of the  Partnership  Agreement  in  effect  on the date of Mr.
Helmsley's  death,  the General  Partners  were required to create a new limited
partnership  with  the  same  attributes  as  IPA  and  convey  all  assets  and
liabilities  of IPA to that  entity.  Because such a course of action would have
resulted  in  substantial  expense  to IPA and no benefit  to the  partners  and
holders of PPI's,  the General Partners  obtained  approval of a majority of the
holders  of the PPI's to  continue  the  business  of IPA,  and the  Partnership
Agreement was amended to that effect effective May 30, 1997.

Effective July 3, 1997, the Partnership Agreement was further amended to admit a
newly formed  limited  liability  company  owned by Mrs.  Leona M. Helmsley as a
General  Partner of IPA,  which  entity was  allocated  a portion of the general
partner interest owned by one of the corporate general partners.

On June 10, 1998, the General  Partner  interests of the corporation and limited
liability  company  owned by Mrs.  Leona M.  Helmsley,  and the Special  Limited
Partner  interests  owned by Mrs.  Leona M.  Helmsley and the Estate of Harry B.
Helmsley were acquired by ScogBell  Acquisition,  L.L.C.  ("ScogBell").  Also on
June 10, 1998,  ScogBell  acquired 282,377 PPI's from Mrs. Leona M. Helmsley and
28,550 PPI's in the over-the-counter market.


                                      S-7
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                   Notes to Financial Statements (continued)

2.    Significant Accounting Policies

      a.    The   preparation  of  financial   statements  in  conformity   with
            accounting  principals  generally  accepted  in  the  United  States
            requires  management to make estimates and  assumptions  that affect
            the reported  amount of assets and  liabilities  and  disclosure  of
            contingent  assets  and  liabilities  at the  date of the  financial
            statements and the reported  amounts of revenues and expenses during
            the  reporting  period.  Actual  results  could  differ  from  those
            estimates.

      b.    Rental  revenue from tenant  leases is recognized on a straight line
            basis over the terms of the associated leases.

      c.    Depreciation of buildings and building  improvements is provided for
            by the straight-line  method over estimated useful lives of 19 to 39
            years.  Leaseholds,  leasehold improvements and tenants' alterations
            are  amortized  over  the  terms  of  the  related  leases.  Amounts
            applicable  to  tenants'  alterations  and the  related  accumulated
            amortization  are  eliminated  from  the  accounts  at the  time the
            related  lease  expires or, if the tenant should vacate the premises
            prior thereto,  unamortized  assets are charged to operations in the
            year the premises are vacated.

      d.    Costs in  connection  with  mortgage  refinancings  are  included in
            deferred  charges  and are  being  amortized  over the  terms of the
            related mortgages.

      e.    Leasing  commissions  are  amortized  over the terms of the  related
            leases.

      f.    IPA's   employees   are   covered   under   multi-employer   defined
            contribution  pension plans. All  contributions are funded currently
            based upon negotiated union  contracts.  Information from the plans'
            administrators is not available to permit IPA to determine its share
            of unfunded  vested  benefits.  During 1999, 1998 and 1997, IPA paid
            approximately $273,000,  $562,000, and $673,000,  respectively,  for
            employees to union plans for pension, welfare and other benefits.

      g.    For the purpose of determining cash  equivalents,  IPA considers all
            highly liquid  investments  with a maturity of three months or less,
            when purchased, to be cash equivalents.


                                      S-8
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                    Notes to Financial Statements (continued)

2.    Significant Accounting Policies (continued)

      h.    Financial  Accounting  Standards  Board ("FASB")  Statement No. 107,
            "Disclosures  About Fair Value of  Financial  Investments",  defines
            fair  value of a  financial  instrument  as the  amount at which the
            instrument  could be  exchanged  in a  current  transaction  between
            willing  parties.  The methods and assumptions  used to estimate the
            fair value of financial instruments are as follows:

            (i)   The  carrying  value of cash and  cash  equivalents,  accounts
                  receivable,  accounts  payable  and  accrued  liabilities  and
                  deposits and rents received in advance  approximate fair value
                  due to the short maturities of these items.

           (ii)   The carrying  value of  mortgages  payable  approximates  fair
                  value due to the short term maturities of the notes.

      i.    Gains  on  sales  of  real  estate  are  recognized  at  closing  in
            accordance with FASB Statement No. 66, "Accounting for Sales of Real
            Estate".

      j.    FASB Statement No. 121, "Accounting for the Impairment of Long-Lived
            Assets  and for  Long-Lived  Assets  to be  Disposed  Of,"  requires
            impairment  losses  to be  recorded  on  long-lived  assets  used in
            operations  when  indicators  of  impairment  are  present  and  the
            undiscounted cash flow estimates to be generated by those assets are
            less than the asset's  carrying amount or on long-lived  assets held
            for sale when the assets  carrying  amount is greater  than the fair
            market  value less costs of disposal  for those assets on a property
            by  property  basis.  IPA  evaluates  each  of  its  properties  for
            indicators of impairment by reference to the undiscounted cash flows
            to be generated  from the operation and sale of the  properties.  No
            indicators  of  impairment   were  present,   and,   accordingly  no
            provisions for  impairment  have been recorded in any of the periods
            presented.

      k.    Basic  earnings  per share has been  calculated  by dividing the net
            income  allocated  to  the  Limited  Partner  by the  820,000  PPI's
            outstanding.  As IPA  has no  potentially  dilutive  securities,  no
            presentation of diluted earnings per share is required.


                                      S-9
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                    Notes to Financial Statements (continued)

2.    Significant Accounting Policies (continued)

      l.    Effective  January 1, 1998,  IPA  adopted  FASB  Statement  No. 131,
            Disclosures about Segments of an Enterprise and Related  Information
            ("Statement  131").  Statement 131 superseded FASB Statement No. 14,
            Financial Reporting for Segments of a Business Enterprise. Statement
            131   establishes   standards  for  the  way  that  public  business
            enterprises  report  information about operating  segments in annual
            financial  statements  and requires  that those  enterprises  report
            selected  information about operating  segments in interim financial
            reports.  Statement  131  also  establishes  standards  for  related
            disclosures about products and services, geographic areas, and major
            customers.  The adoption of Statement 131 did not affect  results of
            operations,  financial position or disclosure of segment information
            as IPA is engaged  in the  ownership  and  operation  of  commercial
            office properties and has one reportable segment. IPA evaluates real
            estate  performance  and allocates  resources based on net operating
            income.  The primary  sources of revenue are  generated  from tenant
            base rents and  escalations  of  operating  expenses and real estate
            taxes.   Operating   expenses   primarily  consist  of  common  area
            maintenance.  The  commercial  office  property  segment  meets  the
            quantitative  threshold for determining reportable segments. IPA has
            no investment in foreign operations.

      m.    Certain   amounts  in  the  1998  financial   statements  have  been
            reclassified to conform to the 1999 presentation.

3.    Real Estate

      Real estate is summarized as follows:

                  Classification                          1999          1998
      --------------------------------------------------------------------------
          Land                                       $ 4,935,164     $10,569,184
          Buildings and building improvements         21,401,388      40,105,028
          Leaseholds and leasehold improvements        7,497,580       7,486,730
          Tenants' alterations                         6,815,828      10,428,851
                                                     ---------------------------
                                                     $40,649,960     $68,589,793
                                                     ===========================

The  amounts  reflected  above  include  one  property  in which  IPA owns a 50%
undivided  interest  as a  co-tenant  in  common.  Accordingly,  it has sole and
exclusive control over its interest, is


                                      S-10
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                    Notes to Financial Statements (continued)

3.  Real Estate (continued)

severally liable for its share of outstanding indebtedness, and is entitled only
to its pro-rata share of income and expenses. On January, 18, 2000, IPA sold its
interest in this property (see Note 14).

On January 22, 1998,  IPA sold to an unrelated  party its leasehold  interest as
ground  tenant  under  its lease  with the City of  Newark,  NJ on the  property
located at 1180 Raymond  Blvd.  As a  consequence  of the  transaction,  IPA was
relieved  of  liability  for  ground  lease  rent and real  estate  taxes on the
property  after  January 22, 1998.  In  connection  with this  transaction,  IPA
recognized a gain of approximately $611,700.

On September  28, 1998,  IPA sold its five Chicago  commercial  properties  (the
"Chicago  Properties") for  $121,000,000.  The sales proceeds were used to repay
mortgage debt, loans from the General Partners, accrued distributions payable to
the  General  Partners  and  Special  Limited  Partners,  sales  commissions  of
$3,025,000 paid to an affiliate of one of the General Partners and other related
costs, aggregating  approximately  $64,000,000.  In addition, IPA made a special
distribution to its partners of  approximately  $57,000,000.  In connection with
this transaction, IPA recognized a gain on sale of approximately $100,683,900.

On April 14, 1999, IPA sold the Mojud Building  located in Long Island City, New
York for a sales price of $6,500,000.  The sales proceeds were used to pay sales
commissions of $162,500 to an affiliate of one of the General Partners and other
closing costs of approximately  $239,000.  In connection with this  transaction,
IPA recognized a gain of approximately $5,580,000.

On May 18, 1999, IPA sold the Midland Savings Building located in Midland, Texas
for a sales  price  of  $300,000.  In  connection  with  this  transaction,  IPA
recognized a gain of approximately $298,000.

On December 16, 1999, IPA sold the 1440 Broadway property for $152,000,000.  The
sales  proceeds were used to repay mortgage debt of  approximately  $17,347,500,
sales  commissions  of  $3,800,000  paid to an  affiliate  of one of the General
Partners and other closing costs of approximately $5,047,000. In connection with
this transaction,  IPA recognized a gain on sale of approximately  $130,557,000.
In addition,  on December 16, 1999, IPA declared a special  distribution  to its
partners  of  approximately  $128,000,000  of which $64,000,000  was paid to the
General Partners and Special Limited Partners in


                                      S-11
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                    Notes to Financial Statements (continued)

3. Real Estate (continued)

December  1999 and  $64,000,000  was accrued  for the  holders of  Participation
Interests, which was paid on January 18, 2000 (see Note 9).

4. Notes Payable to Related Parties

On November 30, 1994, affiliates of the General Partners loaned IPA $18,000,000,
evidenced by two promissory  notes (the "Notes") in the amount of $6,000,000 and
$12,000,000.  These notes were repaid in 1998 with the proceeds from the sale of
the Chicago properties.

The  affiliate  notes bore  interest at a variable rate based on the Chase prime
rate and were payable on demand.  Interest  expense for the year ended  December
31, 1998, with respect to the Notes was $1,160,124.

5. Mortgages Payable

As of December 31, 1999 and 1998, mortgages payable consist of the following:
<TABLE>
<CAPTION>
                                                                         Balance             Balance
                                         Interest Rate                 Outstanding         Outstanding
                                          at December     Maturity     December 31,        December 31,
Description                                31, 1999         Date           1999                1998
----------------------------------------------------------------------------------------------------------
<S>                                            <C>      <C>           <C>                  <C>
Apple Bank for Savings (1):
Mortgage loan in the amount of
  $8,000,000 with fixed interest
  payments collateralized by 1328
  Broadway Building N.Y., N.Y. (in
  which IPA has a 50% tenancy in
  common interest)                             8.5%      4/30/99      $4,000,000           $ 4,000,000
Chase Manhattan Bank (2):
Mortgage loans with variable interest
   rates collateralized by:
1440 Broadway, N.Y., N.Y.                       --        1/2/00              --           $12,203,503
261 Fifth Avenue, N.Y., N.Y.                    --        1/2/00              --               466,985
245 Fifth Avenue, N.Y., N.Y.                    --        1/2/00              --             7,177,000
                                                                      ------------------------------------
Total                                                                 $4,000,000           $23,847,488
                                                                      ====================================
</TABLE>


                                      S-12
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                    Notes to Financial Statements (continued)

5.   Mortgages Payable (continued)

     (1)    The loan with Apple Bank for Savings  ("Apple") matured on April 24,
            1998.  The loan was extended to April 30, 1999,  at an interest rate
            of 8.5% per  annum and was  repaid on  January  18,  2000  using the
            proceeds  from  the  sale of IPA's  undivided  interest  in the 1328
            Broadway property (see Note 14).

     (2)    IPA executed a Note  Modification  Agreement  (the  "Agreement")  on
            April 25, 1996, with Chase Manhattan Bank ("Chase") whereby mortgage
            loans collateralized by five of IPA's properties; 1440 Broadway, NY,
            NY, 261 Fifth Avenue,  NY, NY, 245 Fifth  Avenue,  NY, NY, One North
            Dearborn,  Chicago,  IL and  One  North  LaSalle,  Chicago,  IL were
            generally  modified to provide for: (a) an extension of the maturity
            date until January 2, 1997, at which time all outstanding  principal
            and interest was due and payable,  (b) interest  based on LIBOR plus
            2.25%  or  Prime  plus  .375% at IPA's  option  subject  to  certain
            limitations as defined in the Agreement, (c) cross default and cross
            collateralization  provisions  for the five  properties,  (d)  IPA's
            guaranty of $6,000,000 of the outstanding principal balance, and (e)
            principal  payments with respect to the mortgage loans of $3,000,000
            during 1996.

            On March 28, 1997, a first  modification  to the  Agreement was made
            between IPA and Chase which  extended the maturity  date of the loan
            to January 2, 1998, and provided for principal payments with respect
            to the mortgage loans of $3,000,000 during 1997.

            On March 23, 1998, a Second  Modification  to the Agreement was made
            between IPA and Chase,  which extended the maturity date of the loan
            to January 2, 1999, and provided for principal payments with respect
            to the mortgage loans of $3,000,000  during 1998. In addition,  upon
            the sale of its Chicago  Properties in September,  1998,  IPA repaid
            $16,847,488  of  principal  to  obtain  a  release  for the  Chicago
            Properties.

            On January 2, 1999, a Third  Modification  to the Agreement was made
            between IPA and Chase,  which extended the maturity date of the loan
            to January 2, 2000, and provided for principal payments with respect
            to the mortgage loans of $3,000,000 during 1999. Scheduled principal
            repayments  aggregating  $2,500,000 were made through  September 15,
            1999, with the entire remaining  balance of the loan being repaid in
            December 1999 with proceeds from the sale of the Mojud,  Midland and
            1440 Broadway properties.


                                      S-13
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                    Notes to Financial Statements (continued)

6. Management of Properties

The  properties  are managed by  Helmsley-Spear,  Inc. Mr.  Irving  Schneider is
co-chairman and Chief Operating Officer of Helmsley-Spear, Inc., and owns 50% of
its outstanding  stock.  In addition to providing  general  property  management
services,  Helmsley-Spear,  Inc.  locates tenants and negotiates  leases for its
properties.  Management fees are based upon  negotiated  percentages of revenues
for each property in the portfolio.  Leasing  commissions are based upon varying
percentages of the annual rent paid by tenants obtained by Helmsley-Spear,  Inc.
Management fees and leasing commissions  charged to IPA by Helmsley-Spear,  Inc.
aggregated   $1,287,902  (1999),   $1,969,571  (1998),  and  $2,098,318  (1997).
Additionally,  IPA purchased some of its maintenance supplies and materials from
Deco Supplies Co.  ("Deco"),  an affiliate of one of its partners.  No purchases
occurred in 1999 or 1998. Purchases of $61,000 were made in 1997.

Tenants' security deposits for certain properties are held by the managing agent
principally in special bank accounts;  interest thereon accrues  principally for
the benefit of the tenants.

7. Guaranteed Payments Due to Partners

The Limited  Partnership  Agreement requires that certain guaranteed payments be
made to partners and deducted as expenses in determining net income. The General
Partners and Special  Limited  Partners  receive  guaranteed  payments  equal to
8-3/4% per annum of their "Remaining Original Cash Contribution"  ($1,160,000 at
December 31, 1999,  1998, and 1997). In addition,  the General  Partners receive
guaranteed payments equal to 1/2% of gross revenues,  as defined and the Limited
Partner receives $15,000 per annum.


                                      S-14
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                    Notes to Financial Statements (continued)

8. Allocations of Partnership Income

In accordance with the terms of the Limited Partnership  Agreement,  elements of
income for financial  reporting  purposes were credited (but not  distributed in
cash) to the  capital  accounts  of the  partners  through  January 3, 1997,  as
follows (see Note 9 for the basis on which cash distributions are determined):

<TABLE>
<CAPTION>
                                                                       Special
                                                       General         Limited            Limited
                                                       ------------------------------------------
<S>                                                      <C>             <C>               <C>
A. Net income before items C, D, E and F below           1.5%            48.5%             50.0%
B. Net losses, before items below                      100.0%            --                  --
C. Depreciation and amortization of real estate:
       1.Equal to mortgage amortization (as
           defined)                                      1.5%            48.5%             50.0%
       2.Balance                                         3.0%            97.0%               --
D. Bond discount amortization                             --               --             100.0%
E. Gain on disposition of property:
       1.To the extent of the aggregate
           depreciation and amortization of such
           property included in C(2) above               3.0%            97.0%               --
       2.Balance                                         1.5%            48.5%             50.0%
F. Loss on disposition of property                     100.0%              --                --
</TABLE>


                                      S-15
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                    Notes to Financial Statements (continued)

8. Allocations of Partnership Income (continued)

Upon the death of Mr.  Helmsley on January 4, 1997,  and the  conversion  of his
General Partner interest into a Special Limited Partner  interest,  the elements
of income for financial  reporting purposes are credited (but not distributed in
cash) to the capital accounts of the partners as follows:

<TABLE>
<CAPTION>
                                                                            Special
                                                            General         Limited          Limited
                                                            ----------------------------------------
     <S>                                                    <C>              <C>              <C>
     A. Net income before items C, D, E and F below           .55%           49.45%             50.0%
     B. Net losses, before items below                      36.67%           63.33%               --
     C. Depreciation and amortization of real estate:
            1.Equal to mortgage amortization (as
                defined)                                      .55%           49.45%             50.0%
            2.Balance                                         1.1%            98.9%               --
     D. Bond discount amortization                             --               --             100.0%
     E. Gain on disposition of property:
            1.To the extent of the aggregate
                depreciation and amortization of such
                property included in C(2) above               1.1%            98.9%               --
            2.Balance                                         .55%           49.45%             50.0%
     F. Loss on disposition of property                     36.67%           63.33%               --
</TABLE>

9. Cash Distributions

Net Operating Revenues,  as defined,  are distributable at the discretion of the
General Partners, as follows:
                                               Through            From
                                           January 3, 1997   January 4, 1997
                                           ---------------   ---------------
         General Partners                       1.5%               .55%
         Special Limited Partners              48.5%             49.45%
         Limited Partner                       50.0%              50.0%

Notwithstanding the foregoing,  if with respect to any calendar year the Limited
Partner's  distributive  share  (computed  on the  same  basis  as that  used in
preparing  IPA's  Federal  income tax return) of income  (loss) plus one-half of
such partner's distributive share of long-term


                                      S-16
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                    Notes to Financial Statements (continued)

9. Cash Distributions (continued)

capital  gains  exceeds  the cash  distributions  referred  to  above,  IPA must
distribute  an  additional  amount  equal to such  excess to the  Holders of the
Participation Interests.

In 1999,  1998 and 1997,  Net  Operating  Revenues,  as defined  in the  Limited
Partnership  Agreement,  amounted to  $12,606,987,  $9,803,570,  and $9,174,787,
respectively.  At December 31, 1999,  1998 and 1997,  IPA accrued  distributions
amounting to  $77,979,781  (of which  $64,000,000  was payable to the holders of
Participation  Interests in respect of the sales proceeds of the Mojud, Midland,
and 1440 Broadway  properties),  $10,884,318,  and  $9,847,784,  respectively of
which $71,030,725,  $5,442,159, and $4,923,892,  respectively, are distributable
to the  Holders  of  Participation  Interests.  An  amount  of  $63,999,004  was
distributed to the holders of Participation Interests in January 2000 in respect
of the accrued distribution of net proceeds from the sales of the Mojud, Midland
and 1440 Broadway  properties and  $13,898,110 was distributed on March 31, 2000
to the General  Partners,  Special Limited Partners and holders of Participation
Interests in respect of the accrued distributions of 1999 Net Operating Revenue.

10. Income Taxes

IPA has  obtained a ruling from the  Internal  Revenue  Service that IPA will be
classified as a partnership for Federal income tax purposes, and has received an
opinion of tax counsel  that IPA, as a  partnership,  will not be subject to any
Federal income taxes,  and that each holder of  Participation  Interests will be
treated for Federal  income tax purposes as if he were a limited  partner of IPA
to the extent of his proportionate interest in the Limited Partnership Interest.
Each  partner  of IPA and each  holder of  Participation  Interests  at any time
during the taxable year of IPA must take into account his distributive  share of
all items of IPA's income,  gain, loss,  deduction or credit,  without regard to
whether such partner or holder of  Participation  Interests has received or will
receive any distributions from IPA.  Accordingly,  no provision for income taxes
has been made in the accompanying statements of income.

The amount of income for federal tax purposes  for the years ended  December 31,
1999,   1998  and  1997   was   $150,375,301,   $111,019,115,   and  $9,782,211,
respectively, as and compared with the net income of $150,779,832, $112,747,733,
and   $8,726,836,   respectively,   shown  in  the   statements  of  income.   A
reconciliation of the differences between income as reflected in the


                                      S-17
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                    Notes to Financial Statements (continued)

10. Income Taxes (continued)

accompanying  statements  of income  and the amount of income  for  federal  tax
purposes is as follows:
<TABLE>
<CAPTION>
                                                                  December 31,
                                                      1999            1998           1997
                                                ---------------------------------------------
<S>                                             <C>             <C>                <C>
Net income per statements of income             $150,779,832    $112,747,733       $8,726,856

Depreciation and amortization                        762,866         929,903        1,083,904

Gain on sale of property                              42,439      (1,233,105)              --

Loss on sale of property                                  --              --          (50,660)

Loss on abandonment of property                           --              --               --

Deferred rental income                            (1,082,359)     (1,045,707)              --

Other, net                                          (127,477)       (379,709)          22,111
                                                ---------------------------------------------
Income for federal tax purposes                 $150,375,301    $111,019,115       $9,782,211
                                                =============================================
</TABLE>
11. Gross Revenue From Real Estate

IPA earns rental income under leases principally with commercial tenants located
in its office  buildings.  Such leases  generally  provide for the tenant to pay
minimum  rentals  plus,  in certain  instances,  a portion of  increases in real
estate taxes, operating expenses and increases in the consumer price index based
on lease  escalation  clauses.  Office leases generally range from 5 years to 15
years and contain various renewal options. In addition,  IPA earns rental income
from retail  stores.  Such leases  generally  provide for minimum  rentals  plus
percentage rentals based on the store sales. Retail store leases generally range
from 1 to 5 years and contain various renewal options. All of the aforementioned
leases are accounted for as operating  leases.  Included in Gross  Revenues from
Real Estate for the years ended 1999, 1998 and 1997, are $536,325, $956,247, and
$1,089,301,  respectively,  representing revenue from escalations and percentage
rentals,  and for the year ended  1999,  1998 and 1997,  approximately  $17,000,
$1,400,   and  $256,000,   respectively,   received  in  connection  with  lease
cancellations with former tenants.


                                      S-18
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                    Notes to Financial Statements (continued)

11. Gross Revenue From Real Estate (continued)

The following is a schedule by years of minimum future rentals on  noncancelable
operating leases as of December 31, 1999, exclusive of amounts due as percentage
rent,  expense  escalations  or amounts that would be due from new leases or the
exercise of renewal options under existing leases:

         Years ending December 31:
              2000                               $16,998,000
              2001                                13,739,000
              2002                                10,434,000
              2003                                 9,219,000
              2004                                 6,403,000
              Thereafter                          13,601,100
                                                 -----------
                 Total minimum future rentals    $70,394,000
                                                 ===========

12. Recently Issued Accounting Pronouncement

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
No. 133,  "Accounting for Derivative  Instruments and Hedging  Activities"  (the
"Statement").  In June 1999,  the FASB issued  Statement No. 137, which deferred
the  effective  date of  Statement  No. 133,  requiring it to be adopted for all
fiscal  quarters of all fiscal years  beginning after June 15, 2000. The Company
expects to adopt the Statement  effective  January 1, 2001.  The Statement  will
require IPA to recognize  all  derivatives  on the balance  sheet at fair value.
Derivatives  that are not hedges must be adjusted to fair value through  income.
If a derivative  is a hedge,  depending  on the nature of the hedge,  changes in
fair value of the  derivative  will either be offset  against the change in fair
value of the hedged asset,  liability,  or firm commitment through earnings,  or
recognized in other comprehensive  income until the hedged item is recognized in
earnings. The ineffective portion of a derivative's change in fair value will be
immediately recognized in earnings. IPA does not anticipate that the adoption of
this  Statement  will have a significant  effect on its results of operations or
financial position.


                                      S-19
<PAGE>


                        Investment Properties Associates
                        (A New York Limited Partnership)

                    Notes to Financial Statements (continued)
13. Contingencies

IPA is involved in various  legal  matters  and  disputes  arising in the normal
course of  operations,  the ultimate  outcome of which is not expected to have a
material effect on the financial statements.

14. Subsequent Events

On January 18,  2000 IPA sold its 50%  undivided  interest in the 1328  Broadway
property for a sales price of $43,500,000.  In connection with this transaction,
IPA recognized a gain of approximately $37,400,000. The sales proceeds were used
to repay IPA's $4,000,000 share of the the outstanding  principal balance of the
Apple loan,  sales  commissions of $1,087,500 paid to an affiliate of one of the
general partners and other closing costs of approximately $1,438,000. On January
18, 2000, IPA also declared a distribution  of $37,000,000 to its partners using
the proceeds  from the sale of 1328  Broadway and the  remaining  proceeds  from
previous asset sales. An amount of $18,500,000 was paid to the General  Partners
and Special  Limited  Partners in January 2000 and  $18,500,000  was paid to the
holders of Participation Interests in February 2000.

On April 12,  2000,  IPA  announced  that,  subject to a variety of  conditions,
including  additional  due diligence by the buyer and  definitive  documentation
with respect to finalizing  sales prices and other relevant terms, it had agreed
in principle to sell its 245 Fifth Avenue and 261 Fifth Avenue properties.


                                      S-20
<PAGE>


                        Investment Properties Associates
                        (A New York Limited Partnership)

             Schedule III - Real Estate and Accumulated Depreciation

                                    December 31, 1999
<TABLE>
<CAPTION>

          Col. A               Col. B              Col. C               Col. D                           Col. E
------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Gross Amount
                                           Initial Cost of Company                          at Which Carried Close of Period
                                          ------------------------- Improvements      -----------------------------------------
                                                      Buildings      Capitalized
                                                         and        Subsequent to                Buildings and
        Description         Encumbrances      Land   Improvements    Acquisition       Land       Improvements           Total
------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>           <C>          <C>          <C>           <C>            <C>               <C>
261 Fifth Avenue,
    Building
    New York, New York      $       --    $  987,731   $8,695,910   $ 8,184,257    $  987,731     $16,880,167      $17,867,898
 Marbridge Building,
    New York, New York (a)   4,000,000     2,765,881    1,877,196     1,291,573     2,765,881       3,168,769        5,934,650
 Edgewood and Bellway
    Shopping Centers,
    Houston, Texas                  --       447,893           --            --            --              --               --
 570 Broad Street Building
    Newark, New Jersey              --       502,032    5,937,404     1,560,175       502,032       7,379,663        7,881,695
 245 Fifth Avenue
    Building,
    New York, New York              --       679,520    2,080,700     6,205,497       679,520       8,286,197        8,965,717
                           ===================================================================================================
 Totals                    $ 4,000,000     5,383,057  $18,591,210   $17,241,502     4,935,164     $35,714,796      $40,649,960
                           ===================================================================================================
</TABLE>

        Description             Col. F            Col. G             Col. H
 -------------------------------------------------------------------------------
                                                                  Life on which
                                                                 Depreciation in
                                                                  Latest Income
                             Accumulated         Date of          Statements is
                            Depreciation      Construction          Computed
261 Fifth Avenue,          -----------------------------------------------------
   Building
   New York, New York      $12,363,066            1928                24.3
Marbridge Building, New
   York, New York (a)        2,627,386            1907                19.3
Edgewood and Bellway
   Shopping Centers,
   Houston, Texas                   --            1957                24.3
570 Broad Street Building
   Newark, New Jersey        5,639,677            1962                34.3
245 Fifth Avenue
   Building,
   New York, New York        5,761,568            1923                24.3
                           -----------
Totals                     $26,391,697
                           ===========

(a) Amounts shown represent 50% of amounts applicable to a tenancy in common, in
    which IPA has an undivided one-half interest.


                                      S-21
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

(b) Reconciliation of "Real Estate and Accumulated Depreciation":

                                               Year ended December 31,
                                      ------------------------------------------
                                         1999           1998              1997
                                      ------------------------------------------
Investment in Real Estate
Balance at beginning of year          $68,589,793   $136,524,047   $138,214,361
Sale of real estate                   (29,311,368)   (67,998,324)    (2,606,881)
Improvements and additions              1,371,535      2,201,413      2,208,474
Fully depreciated assets written
  off during the year                          --     (2,137,343)    (1,291,907)
                                      -----------    -----------   ------------
Balance at end of year                $40,649,960   $ 68,589,793   $136,524,047
                                      ===========   ============   ============

Accumulated Depreciation
Balance at beginning of year          $44,261,629   $ 95,613,778   $ 95,710,079
Depreciation charged to costs
  and expenses                          1,974,245      2,781,850      3,349,946
Less amounts applicable to sale
  of real estate                      (19,844,177)   (51,996,656)    (2,154,340)
Less amounts applicable to fully
   depreciated assets written off
   during the year                             --     (2,137,343)    (1,291,907)
                                      -----------------------------------------
Balance at end of year                $26,391,697   $ 44,261,629   $ 95,613,778
                                      =========================================

The  aggregate  basis of real  estate  assets for  Federal  income tax  purposes
amounted to $44,822,622 (1999), $71,268,168 (1998), and $132,029,646 (1997).


                                      S-22